US T+1 Settlement, Affirmation, and Operational Expectations
Overview
Affirmation is a required step in the US settlement cycle for institutional trades. It is the process by which the affirming party agrees that the details on a broker-dealer’s confirmation are accurate so the trade can move to settlement.
Regulatory Basis
Rule: 17 CFR § 240.15c6-2, Same-day allocation, confirmation, and affirmation.
Requirement: Complete allocation, confirmation, and affirmation as soon as technologically practicable and no later than the end of trade date for transactions subject to § 240.15c6-1(a).
Operational cut-off: DTCC affirmation cut-off is 9:00 p.m. Eastern on trade date.
What is Affirmation
Affirmation is the agreement by the institutional investor or its authorized representative, for example the custodian, investment manager, or prime broker, that the broker-dealer’s confirmation details are correct. In the US T+1 environment, this step must be completed on trade date.
Who is the Affirming Party
The affirming party is the instructing party or its delegate. Depending on the operating model, this may be the investment manager, the custodian, the prime broker, or the client itself if self-affirming.
Which Trades are in Scope
Affirmation applies to institutional deliveries settled through ID. Free of payment movements, money market instruments, primary issuance, and repo or lending transactions are not part of the TradeSuite ID affirmation flow.
Platform and Workflow
TradeSuite ID: DTCC platform used to electronically affirm broker confirmations and generate settlement instructions.
Client Trade Manager (CTM): Used by many market participants to confirm allocations and instructions. CTM matching does not replace affirmation; affirmation remains required in TradeSuite ID or by the designated affirming party.
Outcome: When details match and the affirming party confirms, the instruction is released to the custodian and queued for DTCC settlement.
Does Affirmation Guarantee Settlement
No. Affirmation confirms that both sides agree on trade economics and settlement details. Settlement can still fail for reasons such as securities not available to deliver or insufficient cash.
Why Same-Day Affirmation Matters
Increases the probability of settling in DTCC’s nighttime cycle.
Reduces the risk of DKs, delays, and fails.
Lowers DTCC processing costs compared with unaffirmed transactions that miss the nighttime cycle.
If Affirmation is Late or Missing
Trades can still settle by use of Night Deliver Orders or Day Deliver Orders; however, unaffirmed trades are more likely to be DK’d or delayed.
There is no specific late-affirmation penalty at this time, but DTCC costs are higher for transactions that miss the nighttime cycle.
For broker-dealers, failure to complete same-day allocation, confirmation, and affirmation is a regulatory compliance issue under Rule 15c6-2.
Blaylock Van Expectations and Controls
Timing: Complete allocation, confirmation, and affirmation as soon as technologically practicable and no later than 9:00 p.m. Eastern on trade date.
Coverage: Maintain clear designation of affirming parties by account, including primary and secondary contacts and cut-off times.
Monitoring: Daily exception reporting for unaffirmed items, escalation for any trade not affirmed by the cut-off.
Documentation: Record all outreach, reminders, counterparty responses, and any root-cause notes in the centralized log.
Guidance to Counterparties and Clients
Confirm operational points of contact, hours, and cut-offs for our accounts.
Ensure allocations are sent promptly, and that affirmation is completed by 9:00 p.m. Eastern on trade date.
Provide advance notice of any operational issues that could delay affirmation, include expected resolution time.
Frequently Asked Points
Why affirm if CTM is already matched: CTM confirms allocations and instructions; affirmation is a distinct step required in the US process to move the trade into settlement at DTCC.
Can affirmed trades be reversed: Yes, both the affirming party and the broker must agree to cancel or reverse an affirmed trade in TradeSuite ID.
How Blaylock Van Will Support You
We will review counterparties with higher frequencies of late or unaffirmed activity and prioritize outreach.
We will provide reminder language that cites Rule 15c6-2 and clearly states the 9:00 p.m. Eastern trade-date cut-off.
We will host coordination calls on request and engage Operations and Compliance to resolve systemic issues.
We will continue to provide reporting on concentrations by counterparty and by asset type.
For questions regarding affirmation procedures, escalation, or cut-offs, contact Blaylock Van Operations and Compliance.
Contact Operations and Compliance